Paying off $359K in 15 years or less.

It has begun. The great adventure of paying off two mortgages. I’ve been recently inspired by the book Evicted and many clips from news reals during the recession of 2008. Nothing like reality to spurn a plan.

We are debt free outside the mortgages and, here in California, our mortgages are small, especial with this crazy and unsustainable housing market. However, they are still high. Our rental property is $122K and the house we are in now is $237K.

I, and I say I because I’m the accountant and financial fund holder and distributor in this house. Often, have I offered to pass the torch, but my husband has decided that it is my responsibility and he expected me to do my job well. I failed many years. I paid all our expenses and we were well fed, but I look back and realize how much money I could have saved us. It has been a long road rife with lessons in loss of money through lack of careful thought and planning. When there was extra money I spent it on extra groceries, things for the house, thrift store shopping, filling my library with Depression Era and homemaking books. I justified it because it wasn’t being spent at the local casino. Not that I’d have a clue how to gamble or win a hand at cards.

I could wallow in my poor accounting. Instead I look back at my budgeting for our little business, and that is what running a home is like, running a business, and I see my mistakes and weaknesses (books, thrift stores, and Amazon).

Running a household is similar to running a full service Inn. You have the kitchen and pantry to maintain, stock, and keep productive. The Inn needs to be kept clean and tidy. Everything must be organized, linens and clothing mended, free of stains and washed. And then there is the budget. It must be streamlined to run the Inn well, do some improvements, have funds for emergencies and repairs, and show a profit.

Our budget is a combination of Bali’s salary from working part time at a gas station and part time at a corner market. I contribute financially with a small YouTube channel and my book royalties. I’m no famous author and starting the channel over, but if we pool our funds together we can cover all the essentials and save money on the side.

I have been punching in numbers on Dave Ramsey’s mortgage calculator: https://www.daveramsey.com/mortgage-calculator

I figured out the amount we would need to pay on both mortgages to pay the houses off in fifteen years. The mortgage is very low for the rental property and the rent is very reasonable ensuring the good tenants we have now can afford to stay for years to come if they like. We will not raise the rent. If they take care of things, we want them to stay and prosper. The small profit we do make will be enough to add to the mortgage and get it paid off.

Our mortgage will require we gather several hundred extra a month. It is doable, however, our savings will suffer. It’s so important to have a savings for future possible hardships such as an injury or job loss.

I’ve been watching videos on cooking for pennies and was guided to Under The Median on YouTube. They are a couple that live extremely frugal and show how they do it. Their mortgage is paid off and they have lived on one small but decent income and raised 4 boys. Here is the link: https://www.youtube.com/channel/UCalhGzHdjoEn18XraUxsFHg

I’ve been watching old Brother Green Eats videos when Josh (I think that is his name) would do videos on “what you can eat for a coffee a day” or “what you can eat for the price of a Dominoes pizza”. These are eye openers and inspiring.

This is my favorite of his, the What You Can Cook For the Price Of A Coffee A Day: https://www.youtube.com/watch?v=zjeY6Bzg6jw&t=19s&ab_channel=ProHomeCooks

And this one, you will be very inspired. I got so many ideas for shopping off this video How To Make 1 Month of Food Stamps Last 2 Months: https://www.youtube.com/watch?v=UUZuu3JPzXM&ab_channel=RainDove

I’ve also made a video myself on a crash coarse in learning the frugal lifestyle through books that teach and inspire: https://www.youtube.com/watch?v=TlfnwjrOVE8&t=1720s&ab_channel=She%27sDrinkingCoffee

I have to immerse myself in this way of thinking and adjust our life daily. We have stripped the budget down to essentials with the exception of monthly donations. All I can do now is reduce the grocery bill, the gas we use in the car, the utilities we have some control over such as gas for heating and baking, and the water. We have solar, garbage is what it is.

We rarely drive. The weather has been lovely so we walk everywhere. The last few days we have walked downtown to purchase some baking supplies I forgot to stock up on and a cabbage for last nights chow mien. We love having reasons to walk around our town. A tank of gas will last us a month or more, I haven’t tested it yet, only assuming. Bali does commute four days a week but he takes the small car that gets fantastic gas mileage.

The grocery budget has been reduced to $300. A far cry from before. I don’t even want to know how much we used to spend. The only way to control it is by having a cash envelope that you fill up in the beginning of the month and stick with it. Once you use the money, you have to wait for the next month. It’s the same if you were on food stamps. You limit your freedom. You only do the big shopping once a month and then divide the remaining money up for the next three weeks for fresh produce or milk.

I have a pantry stocking video coming out December 9th and another video showing how I stocked up from WinCo for $450 on December 10th. We were only finishing up the stocking up. I don’t know how much it cost to completely stock our pantries. This includes food, pet food, medicines, first aid, vitamins, cleaning supplies, and toiletries. We’ve been doing it over time since the first shelter in, but I can guesstimate that it was around $2000 or less for a full stock up.

And with a full pantry and toiletries, it is very easy to stay under the grocery budget.

I’ve asked Bali if his boss would be willing to give him a tank of gas each week to help with commuting cost. Bali has not received a raise in ages and probably won’t for some time as the gas station has a new owner and has seen some hardship with shut downs and construction across the street that has literally shut down the streets to the station for weeks at a time. Things are picking up but to ask a boss for a raise when times are rough is not wise or fair. But some free gas is a great compromise. That will save us $150 plus a months that can go into savings.

I’ve lowered the internet and phones as low as we can go. We need both for work and life. Donations stay.

We started out December with a bang. I’ve already started making the new mortgage payments, have my grocery envelope, watching my inspiring videos to find new ideas or refresh old habits.

And many ask, “do you ever feel deprived?” The last two years we have lived on a shoe string budget and I will share that soon. What I learned was this: when you have a goal you will happily give up a lot of things. You can live on so much less than you think you can. You have to pay yourself first and force yourself to get hardcore. The more progress you make and the faster you see big changes, the more likely you will stay motivated.

And so it begins.

55 thoughts on “Paying off $359K in 15 years or less.

  1. I’m glad you’re enjoying Under the Median channel. I just took out my complete Tightwad Gazette again for inspiration and a refresher course. 😁 It’s time to get hardcore tightwad! I look forward to learning some new tips and tricks from you.

    Liked by 1 person

  2. Asking for free gas in lieu of a raise is a great idea! You are so wise to try to pay off mortgages as quickly as you can. There is such a feeling of freedom and security knowing your home is paid for.

    Back in the mid-90s we had a lovely, 1930s-era cottage with a very reasonable monthly payment (about $450 a month including tax and insurance). We could have afforded a lot more but I am so glad we chose that house because 4 years later I had to quit my job as an RN due to health issues. Our income was cut in half but with a low house payment and cars that were paid off the summer I quit, we were okay. And then a year or two later we were stunned to receive an inheritance we hadn’t expected for many more years. My husband’s grandmother decided to give the money to her four grandchildren while she was still alive. Her request was that we each use it to pay off our homes. We sold our house and bought one in the country, paying for it in full. One of my husband’s siblings did likewise; the other two didn’t and lost a lot of money in bad investments. For the past almost 23 years we have been without a mortgage payment and it has been wonderful!

    I look forward to following your journey. 🙂

    Liked by 5 people

  3. Very inspiring Kate! Me too,i have great goals for the upcoming year and have to go all in to make it happen,counting on your videos and blog to help me out with inspiration and wisdom.p:s your writing has largely improved,congratulations!

    Liked by 1 person

  4. Very inspiring and helpful, Kate.
    We are reducing expenses and saving as much as we can to buy a home with more property in a few years. Everything helps and your experience and details inspire me to put more effort forth.

    Liked by 1 person

  5. Very inspirational. I have a 25 year mortgage. I do not agree with Dave Ramsey on a 15 year mortgage. Sure, if you could afford it, and have 2 incomes into the family. But, you want to live here and now. And, if you see the value of your money today, and the value of the money in 15 years, it will not be the same. He forgets to bring the inflation into the occation. I would do the other baby steps, but not the paying off mortgage early. You get a relief in your taxes if you have a mortgage and interest on it. (Norway) In addition, over all those years the value of the home has risen. If you watch other financial advisors on youtube, they will explain why paying off your mortgage is not the way to go. It is better to invest, and in your case paying off the rental home.
    On the food budget topic; I have just found another channel on YouTube, one of my favourites, Mary from Marysnest.com
    She does everything kitchen, cooking, canning, making her own healty coffeecreamer, cookiemixes and so on. Go over and get inspired. 💕
    I am so with you on a tighter budget for 2021, lets make it a fun challenge! 👍

    Like

  6. Very inspirational. I have a 25 year mortgage. I do not agree with Dave Ramsey on a 15 year mortgage. Sure, if you could afford it, and have 2 incomes into the family. But, you want to live here and now. And, if you see the value of your money today, and the value of the money in 15 years, it will not be the same. He forgets to bring the inflation into the occation. I would do the other baby steps, but not the paying off mortgage early. You get a relief in your taxes if you have a mortgage and interest on it. (Norway) In addition, over all those years the value of the home has risen. If you watch other financial advisors on youtube, they will explain why paying off your mortgage is not the way to go. It is better to invest, and in your case paying off the rental home.
    On the food budget topic; I have just found another channel on YouTube, one of my favourites, Mary from Marysnest.com
    She does everything kitchen, cooking, canning, making her own healty coffeecreamer, cookiemixes and so on. Go over and get inspired. 💕
    I am so with you on a tighter budget for 2021, lets make it a fun challenge! 👍
    You can do this.
    Inger.

    Liked by 3 people

  7. This is by far your most inspiring post. You can do this. I think it was wise to ask Bali’s boss to pay for his gas. We are in talks here about starting our own business.

    Liked by 1 person

  8. Great inspiration, Kate! We too have a big savings goal for 2021, to complete an addition to the house. I’ve toyed with getting a home equity loan as the house is paid for but you’ve inspired me to buckle down and just save up so we remain debt free. Nothing can compare to the security that comes with owning your own home. Looking forward to stretching pennies alongside you.

    Liked by 1 person

  9. I don’t know why anyone would ask if you ever feel deprived because your videos show the happiness, educating your children with awareness to the world, nurturing and love of your family and home. (even the dogs seem happy).

    Liked by 1 person

  10. Lol, I think it’s an open question for all the others that are just learning to be frugal and at first it is confusing and such change. You have to shift to loving this to loving that…

    Liked by 1 person

  11. We want to finish a shed that Bali started and we get so tempted to just buy the supplies but then we patiently look on Craigslist for free lumber and such. It’s hard to wait, lol.

    Liked by 1 person

  12. Thank you for the video/blog links; most of them I knew. I so wish we could pay off our home but we are on SS only, unable to work anymore due to health problems (I have non-Hodgkins lymphoma) and are trying very hard to pay off a big credit card debt. When that is paid off, I will sink that money into the mortgage. If any of you are 40s and under, here is my advice to you: Stay TOTALLY away from credit card debt and car debt, sink as much money as you can into savings, try to pay for all large purchases with cash, if you can’t pay for a home with cash then move into a neighborhood or on land that you know will always be in a decent location and then sock all your money into your mortgage. The list of DON’Ts is larger than the list of DOs and come at a high cost. Thank you, Kate. Fantastic suggestions and advice.

    Liked by 1 person

  13. So inspiring!! We just did a refi on our home and payment dropped extra 200plus hundred, and we were already paying extra 200 per month, but I’ll admit we had a bad loan so goal now is to pay 400plus per month and hopefully get it paid off around 15-20yrs. We’ve had home 4 yrs now and owe about 320,000 in Cali (Ventura county area) I took part time job to help. (Luckily only M-F 4 hrs still have plenty time to do my meal planning and love my humble home😉) We are very determined as well. Hubby and I are 50-52 so want to be done by 65. Love all your videos, always so inspiring!! I wake up early before I go to work to watch as I get ready with coffee. Makes my day.☺️ Thank you Kate!!

    Like

  14. I admire your goal of paying off your homes. Honestly, savings really should be your priority. You can’t get that compounding back. Should you reach the point where savings is adequate and mortgages significantly low, you can always pay off from savings. Yes, this is from experience. Our investments outearned the interest rate significantly. And we still paid off 2 mortgages quite early.

    Liked by 1 person

  15. I’d love to hear about your contingency/emergency budget or plan for things that hopefully will never happen, like Bali not being able to work or your rental house being empty. Do you have a savings goal as well as paying off the houses, or has that already been met so doesn’t factor into it?

    Liked by 1 person

  16. The standard deduction in the US is $24,800 for 2020… unless you can exceed that with your interest deduction, ect…it’s not worth keeping mortgages if you get the standard deduction anyway. Definitely ask your tax advisor!

    Liked by 1 person

  17. My husband and I paid off our mortgage in 11 years. It was the best financial decision we ever made. That was 12 years ago. You can do it but it will take sacrifice and throw every bit of extra money to it.

    Liked by 1 person

  18. Excited for you all! We were debt free for years and then bought our first home 4 years ago. Then medical issues and long story short… We have car debt and credit card (zero interest) because our furnace and AC both went and we had to replace them. We’re currently building our emergency fund back up some, then going to attack the credit card debt and should pay it off before interest even is charged. After that, the car and then we plan on fully funding our retirement at 15% of our pay. After that, we want to pay off the house.

    We could pay the house off in 5-8 years if we didn’t fund the retirement but I’ve heard many stories on Dave Ramsey of people that have a paid for mortgage but no retirement. Medical bills wipe them out and their house is taken! Since I already have medical issues, retirement $$ is crucial for us to have. Plus, the compounding interest is more than the interest we’d save on our mortgage.

    We only put in $660 in our retirement this year but made almost $10,000 in interest! This year was a loss but it quickly recovered and we came out with $10K more than started this year with.

    Liked by 1 person

  19. I have the same goals to pay off our home before my husband retires . He is 59 so time to get that done is getting shorter every day. Our daughter and her husband rent the house from us and we are not in any hurry to pay that off at this point. Both of our mortgages are well under 100 grand each , our hone is less than the rental , and as long is this house that we’re living in is paid off by the time he retires , the other house is paid by our daughters rent payment ! When she and her husband get to the point They can buy a home and do not want to purchase the house from us , we will sell it and put that money toward paying off this house. If this house is paid off that money will go in the bank for emergencies.
    I’m glad you’re promoting people paying off the mortgage because I think the freedom from not having a mortgage would be huge for most people. I think we get in the habit of paying rent or mortgage and just think it’s always going to be that way. When we realize that we can pay it off and not have that payment anymore, except for the stuff we have to put away for taxes and insurance, it’s a very freeing thought and worth working toward!😁

    Liked by 1 person

  20. That’s great your children are in that home. I would like that for the rental, then I’d have two gardens! Sort of. We can grow different foods in the valley we can’t grow up here.

    Liked by 1 person

  21. Thank you for the article! I’m wondering if you receive a fairly steady stream of gift cards? I know you have gotten them in the past. They must help stretch your budget! Also, do you qualify for any assistance like SNAP? I don’t know if you qualify, but that would also be helpful.

    Liked by 1 person

  22. Kate, have you contacted your banks and told them what you are doing? There are certain instructions you need to follow otherwise the banks will apply your payments to interest and you’ll still be on the hook for the principal. Not a good thing. Also, the more write offs you have for your rental, which is a business, the lower your taxes will be. The mortgage payments might be a very good thing then on the rental. You have to pay taxes on the profits. You really need to sit down with a CPA, which sometimes they offer free services or at least the 1st hour free. Have a list of questions ready.
    Good luck.

    Liked by 1 person

  23. I paid off my mortgage in 16 years without paying an extra penny. Hubby and I bought a home in 1985 and over the years we did DIY paycheck remodeling (new windows, new oak wood floors, kitchen, bathrooms etc) In 2001 we sold our home with enough saved equity (the home quadrupled in price) that we were able to buy another home for cash (brand new custom built on 3.5 acres), buy two cars and had enough cash left over to fund two retirement accounts and I retired at the age of 50. I never had to hold a job ever since. Hubby dabbles.
    My experience was to have the home work for us NOT the other way around.
    We never tapped into the equity for anything (especially remodeling).
    Good luck.
    Just know there are many ways to ‘skin a cat’ as the saying goes.

    Liked by 2 people

  24. We are not in a hurry with the rental and I have an accountant, I will talk to her soon, because I need guidance for sure. I have contacted the banks previously and was informed that any extra paid would go to principal…but I need to check with this loan as well. Thank you for the reminder.

    Liked by 3 people

  25. Very ambitious! I applaud you and am inspired. That is quite a goal. Good to have goals – we need to establish better and more specific goals otherwise we squander our resources and/or just don’t DO anything. Like Cindi mentioned about the mortgage payments with the bank, I always type out a letter with specifics and ask them to use our extra payment towards PRINCIPAL ONLY. I write those words on the check too. And I ask for email confirmation when it was applied. Just an FYI. Now you’ve inspired me to try to pay more money into our extra payments. I KNOW there are things we can cut; it’s just a matter of wanting to. 🙂

    Liked by 2 people

  26. A suggestion save the money in an account do not immediately pay it towards your mortgage .When the amount you have saved equals the mortgage balance , then you can decide to pay it off .That way you have the security and comfort of having money in savings for the unexpected .Of course that requires you to not touch the money for any thing but extreme emergencies. I would have suggested investing something like a Vanguard account, but that is not something you do if you are not comfortable, investing can be a roller coaster!

    Liked by 1 person

  27. We paid off our first home with a 30 year mortgage in 15 years, lived mortgage free for 15 years after. We were able to save and invest so that we moved to our dream home with a tiny mortgage. It’s slow and steady paying off a home in full. We couldn’t have done it without sacrifice but we didn’t deprive ourselves or our children to make it happen because my husband had a great job. Doing it on a small income would be more difficult for sure.

    Liked by 1 person

  28. We did the same, never used any equity and paid off our first home in 15 years. When we sold the profit was substantial but the home values also rise where you want to live as well. And property taxes are based on the assessment so they always rise too. Real estate is a solid investment but there are many things to consider.

    Liked by 1 person

  29. I know you have to designate the extra funds for Principal or interest to make sure it goes there specifically.Otherwise it will go to the overall balance which includes interest.I pay my HELOC on-line and designate extra every month and there is a choice to where you want it to go.Please look into making sure it goes to where you want it. If you put it all on one check say it will go to the general balance.Someone else mentioned a savings for emergency. This should probably be met before you attack the mortgage balance.Piece of mind that you can cover an emergency is worth it.

    Liked by 1 person

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